Hey Denny, did you see this:
SAN DIEGO--(BUSINESS WIRE)--Oct. 28, 1999--
INTERNET STOCK NEWS: Oct. 28, 1999
"Pre-IPO Report: iBasis" by A. Sahoo, ISN Writer
Also available on the Web at
internetstocknews.com
Internet telephony IPOs have been hot this summer: ITXC Corp.
(Nasdaq:ITXC.O), Net2Phone (Nasdaq:NTOP.O), Clarent Communications
(Nasdaq:CLRN.O) and Phone.com (Nasdaq:PHCM.O) are currently trading at
300%, 500%, 600% and a whopping 2000%, of their July issue prices,
respectively. Next on the block is iBasis (Nasdaq:IBAS), scheduled to
price the week of November 1. Judging from its vital signs, it looks
like another winner.
iBasis, formerly VIP Calling Inc., provides wholesale voice and
fax over Internet Protocol services over its Cisco-powered iBasis
Network(TM), a network of high-capacity points of presence located
across Asia, Europe, the Middle East and the Americas. Founded just
three years ago, it has already established a large infrastructure,
fueled by deals with local telcos in China, Japan and Hong Kong.
Unlike the many IT companies that are marketing services directly to
users (E-Net (Nasdaq:ETEL), Franklin Telecommunications (AMEX:FCM.A),
Net2Phone (Nasdaq:NTOP.O), and others), iBasis' customers are carriers
and telephony resellers -- putting it in the smaller category of
offering large scale, "carrier class" services a la ITXC and AT&T
Clearinghouse (NYSE:T.N) -- a market segment controlled by a handful of
players and estimated by International Data Corp. to grow to $2.0
billion by 2004.
One thing I really like about this company is its pedigree.
There's just no substitute for seasoned management and brand-name
relationships. President & CEO Ofer Gneezy -- an MIT & Harvard trained
engineer and executive -- proved his leadership ability when he
created Acuity Imaging, a multinational leader in industrial
automation, led it to profitability, and then orchestrated its
acquisition by the second largest company in its industry. The rest of
the team has similar experience in high tech and telecommunications.
Venture capital funding has come from established talent spotters
Integral Capital Partners, Menlo Ventures and Technology Crossover
Ventures, who have contributed funding towards some of the tech
world's most successful enterprises, including Healtheon
(Nasdaq:HLTH.O), Inktomi (Nasdaq:INKT.O), Ascend Communications
(Nasdaq:ASND), Infoseek (Nasdaq:SEEK), Hotmail -now (Microsoft:MSFT)
and Intuit (Nasdaq:INTU.O). The underwriting is being led by Robertson
Stevens and Hambrecht & Quist.
iBasis has also established strategic relationships with
well-known IT players. As one of Cisco's (Nasdaq:CSCO.O) 30 Alliance
Partners, IBAS has access to matching funds and resources for sales,
marketing and technical development activities. It is also working
with Belle Systems on billing system integration and is licensing call
routing software from Netspeak (Nasdaq:NSPK.O).
Typical of companies in this sector, revenues have been growing
exponentially -- from $1.9 million in service revenues last year, to
more than $6 million for the half of 1999 -- with a 41 cents per share
loss for the first half of this year. Representing about 31.1 million
minutes of traffic over its network, that puts IBAS in the same size
category as its principal competitor, ITXC. A note of caution on these
glowing sales figures, however -- IBAS' prospectus clearly states that
40% of sales are derived from just 3 customers -- World Access Telecom
Group, Star Telecomm and WorldxChange Communications. Problems with
one or more of these accounts could significantly impact IBAS' share
price once it begins trading.
Given the oftentimes-irrational nature of the market --
particularly in regards to Internet-related IPOs -- it's impossible to
predict what will happen to IBAS once it hits the boards next week.
Judging from the performance of comparable IPOs, however, I'm betting
that, at least in the near to mid-term, IBAS will be a winner.
Sorry for the poor pasting job...but I do like what it says about our FCM.
Later, Rick |
